Method and system for processing internet payments using the electronic funds transfer network

ABSTRACT

A computer implemented system is provided for processing payments. A server including a computer memory storing a first database including a directory is provided. The directory includes authenticated registrant information comprising authenticated information for a payee, the directory identifying via a publicly available account identifier at least one linked account of said payee. The system also includes a payor computer having access to the directory and a first bank computer linked via a computer network to the server, the first bank computer configured to access payor account information from a payor account at the first bank. The first bank computer is also configured to receive payment information from the payor computer identifying the payee and to transmit a payment from the payor account at the first bank to the linked payee account located at a second bank without using an intermediary to transfer said payment.

RELATED APPLICATION

“This patent application is a continuation of U.S. patent applicationSer. No. 13/102,113 filed on May 6, 2011, which is a continuation ofU.S. patent application Ser. No. 12/576,463, filed on Oct. 9, 2009 (nowPat. No. 7,962,409), which is a continuation of U.S. patent applicationSer. No. 10/356,171, filed on Jan. 31, 2003, (now Pat. No. 7,676,431)which is a continuation of U.S. patent application Ser. No. 09/497,307,filed on Feb. 3, 2000, (now Pat. No. 6,609,113) all of which are herebyincorporated in their entirety. U.S. Pat. No. 09/497,307 claims priorityfrom U.S. Provisional Patent Application Nos. 60/132,305, filed May 3,1990; 60/150,725, filed Aug. 25, 1999; 60/161,300, filed Oct. 26, 1999;60/163,828, filed Nov. 5, 1999; and 60/173,044, filed Dec. 23, 1999, allof which are hereby incorporated by reference.”

FIELD OF THE INVENTION

The present invention generally relates to systems and methods forconducting electronic commerce, and more particularly to systems andmethod in which a payor pushes electronic credits to a payee using anElectronic Funds Transfer system.

BACKGROUND OF THE INVENTION

Presently, there are several methods by which a consumer canelectronically pay for purchases made on the Internet, such as creditcards, off-line debit cards, online debit cards, digital cash, and smartcards. Each of these methods has its own advantages and disadvantages.An off-line debit card uses the traditional credit card system forclearing the payment but no Personal Identification Number (PIN) isrequired. The use of an on-line debit card requires that the consumersupply his or her PIN, and the amount of the purchase is debited fromthe consumer's account instantaneously. One disadvantage with both theon and off-line debit cards, from a consumer's point of view, is theinability to reverse or repudiate the transaction. In contrast, by useof a credit card, the consumer at a later date can reverse thetransaction (e.g., if the purchased goods are never shipped to theconsumer).

It is predicted that credit cards will be the dominant on-line point ofsale (POS) payment choice for at least the next five years. While newInternet payment mechanisms have been rapidly emerging, consumers andmerchants have been happily conducting a growing volume of commerceusing basic credit card functionality. None of the emerging efforts todate have gotten more than a toehold in the market place and momentumcontinues to build in favor of credit cards.

At the present time, there are several large market segments for anonline payment system. First, high volume, low dollar payments fromconsumers to providers of on-line digital intellectual products orservices such as written materials, music, software or games. These caneither be ‘Intrapreneurs,’ individuals or small merchants marketingtheir products directly to consumers, or larger intermediaries, eithertraditional retail merchants or auction sites that aggregate consumersand sellers to facilitate sales. A second large market segment involveselectronic payments from consumers to other consumers. A third andgrowing market segment resides in business to business electronicpayments.

The market opportunity will continue to explode as what is currentlythought of as the Internet continues to expand. In general, the Internetis thought of as Personal Computer (PC) and telephone based. However,that model is quickly changing to include broadband communication viaterrestrial links such as Digital Subscriber Line (DSL), wireless andtwo-way cable. The end number of devices is also expanding to includecellular phones with video displays as well as interactive television,Personal Digital Assistants (PDAs) and kiosks with Internet access. Bothof these changes will only serve to increase the number of end pointsand consumers who will have a need for high-volume, low dollar paymentcapabilities.

Overall, retail consumer sales as well as business to business sales onthe Internet are projected to grow exponentially. The bulk of thepayments for these sales are expected to be done with credit cards,which are widely available and owned, are supported by an establishedinfrastructure and provide merchants and consumers with a high degree ofsurety of payment and receipt. While there are clear differences in theways in which consumers use credit cards, traditionally, consumers haveused them for larger dollar purchases. In recent years, debit cards haveentered the market and have been used as cash and check replacements,replacing lower-dollar volume transactions for purchases of consumable,products such as food and gasoline.

Debit and credit card transactions are currently processed using theElectronic Funds Transfer EFT network. The debit message comprising thetransaction is carried over the EFT network from the point oforigination (e.g., a Point of Sale (POS) location, an ATM machine, or anInternet merchant) to the financial institution that issued the card (orits representative). Currently, only debit messages are carried by theEFT network, including debit reversal messages. A debit reversal messagereverses a previously processed debit transaction and is generally notconsidered a credit.

U.S. Pat. No. 5,220,501 to Lawlor, et al., describes a home banking andbill payment system that uses the EFT network. As described in thepatent, the systems and methods of Lawlor performs a traditional debitpull from the user's bank account using the EFT network and subsequentlymakes payments using conventional means such as the ACH network or paperchecks. Furthermore, the system of Lawlor uses a centralized computer towhich the user attaches via a dedicated phone connection as opposed toconnecting through the Internet.

Although credit and debit cards have emerged as the most popular form ofpayment over the Internet, there are drawbacks associated with each ofthese payment types. Notably, each have a relatively high cost thatincludes a processing fee plus a merchant discount of 1.4% and up. Therelatively high fees support the credit card business model. Whilecredit and debit cards may continue to be a viable payment option formerchants selling relatively high ticket items over the Internet, creditand debit cards are not economically viable for purchases of lower costitems. For lower-cost items, the relatively high transaction processingfees plus the discount result in the transaction processing feeconsuming a relatively high proportion of the total revenue generated bythe product sale. These characteristics of a low cost item lendthemselves to a low cost payments solution that is guaranteed, yet doesnot require the payee to bear the burden and risk of authentication.

The Internet is spawning a direct model in which manufacturers ofproducts or services are able to deal directly with consumers. Thismodel has several implications for the payment process. First, byeliminating the middleman, the direct model is resulting in intenseprice competition, with manufacturers having much tighter margins. Thiscompetition creates the need to minimize all costs especially paymentprocessing costs. Second, the Internet enables the development of largenumbers of independent producers to ‘set up shop’ on the Internet andimmediately have access to large numbers of consumers. Third, a largeand increasing number of intellectual products such as publications,music, video, software, games are more efficiently distributed digitallyover the Internet rather than through traditional physical (paper ordisc) media. While this trend has already started, as higher bandwidthand increasingly sophisticated devices enter the marketplace, it isexpected to increase significantly. Many of these purchases will havethe following characteristics: low cost to the consumer and the abilityto purchase individual works (i.e.: a song, a video, an article, agame). These characteristics call for a payment form that has a lowcost.

By combining these two trends—direct merchant to consumer distributionfrom independent ‘intrapreneurs’, and the ability to distribute productsdigitally—a new marketplace has emerged for low dollar, high volume,real-time payments with payment surety for both consumers and producers.Larger intermediaries, such as existing on-line merchants and auctionsites will also benefit from a low-cost payment device for high-volume,low-dollar payments for all of the same reasons outlined above. On-linemerchants are currently facing a variety of problems including a lowvolume of on-line purchases relative to the number of site viewers; ahigh volume of charge-backs for on-line purchases; non-integrated‘patchwork’ systems for payment processing; high fraud rates and highprocessing fees. All of these factors serve to depress the potentialnumber of customers who are comfortable purchasing on line as well asdepressing the profitability of on-line merchants.

Furthermore, to date, there is no efficient way for consumers to makepayments to other consumers using the Internet. All traditional forms ofperson-to-person exchange include the physical exchange of cash orchecks rather than a real-time digital exchange of value. In addition,the high cost of retail wire transfers (i.e., Western Union) is costprohibitive to a significant portion of society.

Automated Clearing House (ACH) payments have begun to be used withrespect to payments made via the Internet. These types of transactionstypically involve payments made with respect to loans, insurance andutilities. It is predicted that ACH payments will not be widely deployedto on-line POS for two reasons. First, an ACH transaction does notprovide transaction authorization, and secondly, authentication requiresa pre-existing relationship between the customer and the merchant.Furthermore, ACH payments have to be received, deposited and clearedbefore the funds are available. In contrast to ACH transactions, creditand off-line debit cards require authorization but not authentication.Similarly, on-line debit requires authentication (i.e., a PIN or otherauthentication). As with credit and debit card transactions, ACHtransactions requires that the user provide the merchant (payee) withthe “keys” to the user's account. This pull model of effectuatingpayments again raises the security concerns discussed herein (e.g.,fraud).

Two significant drawbacks with some or all of the above models forInternet POS payments are that: 1) a pre-existing relationship betweenthe consumer and the merchant must exist; and 2) the consumer isrequired to provide the merchant with his or her account and/or PIN. Thefirst drawback of some of the above models cannot be practicallyovercome as it is impossible for a consumer to have pre-existingrelationships with all of the potential merchants conducting business onthe Internet. With respect to the provision of the consumer's accountand PIN number over the Internet, even though mail order companies havebeen operating in this manner for years, many consumers feel uneasyabout electronically providing their account and PIN numbers tostrangers over the Internet.

FIG. 1 depicts the conventional debit/credit transaction model. In thismodel, if the consumer 100 desires to buy a compact disc (CD) from a webretailer 110, the consumer 100 electronically transmits its debit orcredit card number and/or PIN to the web retailer 110. Upon receipt ofthis information from the consumer 100, the retailer 110 submits theproposed transaction to its bank 120 or merchant acquirer via the EFTsystem (not shown) for approval. The merchant's bank 120 then contactsthe bank 130 (issuer bank) which issued the debit/credit card to theconsumer 100. The issuer 130 checks the consumer's balance on the cardand either approves or rejects the proposed transaction. This approvalor denial is transmitted from the issuer bank 130 back to the merchantbank 120 which then informs the web retailer 110 of the approval ordenial. If the charge to the debit/credit card was approved, thetransaction is completed by the web retailer 110 shipping the goods tothe consumer 100.

Some of the same drawback described above with respect to Internetshopping equally apply to electronic bill payment. The first drawback,requiring a pre-existing relationship between the consumer and billpayee is not as great a concern because this relationship most likelyalready exists between the consumer and the payee (e.g., the telephone,cable or utility company). The second drawback which requires theconsumer to provide the payee with his or her account and/or PIN stillremains a concern with electronic bill payment. Although fraud is lessof a problem for bill payment, since the consumer presumably has regulardealings with the payee, some consumers still view the provision of thepayee with at least his/her account number a diminution in theconsumer's privacy.

SUMMARY OF THE INVENTION

The present invention represents a new paradigm for effectuatingelectronic payments that leverages existing platforms, conventionalpayment infrastructures and currently available web-based technology toenable e-commerce in both the virtual and physical marketplace. Theconcept provides a safe, sound, and secure method that allows users(consumers) to shop on the Internet, pay bills, and pay anyone virtuallyanywhere, all without the consumer having to share account numberinformation with the payee. Merchants receive immediate paymentconfirmation through the Electronic Funds Transfer (EFT) network so theycan ship their product with confidence that the payment has already beenreceived. The present invention further enables small dollar financialtransactions, allows for the creation of “web cash” as well as providesfacilities for customer service and record-keeping.

The structural components to the system of the present inventioninclude: a Payment Portal Processor; a digital Wallet; an Internet PayAnyone (IPA) Account; a Virtual Private Lockbox (VPL); an AccountReporter; the existing EFT networks; and a cash card. The Payment PortalProcessor (PPP) is a software application that augments any Internetbrowser with e-commerce capability. The PPP software sits in front ofand provides a secure portal for accessing (finking to) the user's.Demand Deposit Accounts (DDA) and IPA accounts. The PPP enables the userto push electronic credits from its DDA and IPA accounts to any otheraccounts through the EFT network.

Although the PPP can be used as a stand alone product, in a preferredembodiment, the functionality of the PPP is directly incorporated into anew form of PPP enhanced digital Wallet in order to enhance theconsumer's Internet shopping experience. Alternatively, hooks to the PPPcan be incorporated into existing digital Wallets to add the uniquepayment feature of the PPP. Furthermore, features of online banking(e.g., funds transfers) can be incorporated into the PPP to allow foraccount maintenance and IPA account funding. In association with thetraditional Wallet functionality and the Account Reporter of the presentinvention, the PPP is used to fund consumer's accounts, shop on the web,pay bills, pay anyone, store electronic receipts and transactionhistory, and review the user's recent account and shopping activity. ThePPP thus provides consumers with a safe, secure, and convenient way toconduct financial transactions over the Internet.

The majority of the prior art electronic Wallets on the Internet todayare primarily used as a convenience vehicle, merely providing a methodof storing account number information and other form filling functions(e.g., shipping addresses). In contrast to traditional Wallets, the PPPenhanced Wallet of the present invention is associated with one or moreDDA and/or IPA accounts. The PPP thus provides the user with a form ofvirtual cash that is secure and guaranteed. The PPP further contains areceipt feature and archive feature that maintains a transaction historyof all payment activity with respect to accounts linked to the PPP. ThePPP further has the capability to store miles, coupons, sweepstakes orother marketing incentives associated with use of the accounts linked tothe PPP. The PPP enhanced Wallet enriches the consumer e-commerceexperience by eliminating the tedious process of tilling out lengthypayment and shipping fields as this is done automatically. Merchantssignificantly benefit from the credit push and form filling features ofthe PPP enhanced Wallet, since research indicates that most e-commercepurchases are abandoned at the POS due to consumers' unwillingness tocomplete lengthy forms or provide personal credit card numbers.Furthermore, the automatic form filling features of the PPP enhancedWallet reduces shipping errors, as the “ship to” address isautomatically filled in, eliminating manual entry errors.

In one embodiment of the present invention, the user supplies the PPPwith its credit card number. The user is then given the option given theoption to fund the payment with his or her credit card. The PPP contactsthe credit card issuer authorization for the credit in the amount of thepayment. When the authorization is returned, the EFT credit to the payeeis funded from the funds from the credit card. The user's bank thensettles with the credit card issuer at the end of the day.

The IPA account is a special purpose account with limited functionalityfor originating electronic payments. Funds in an IPA account can only beaccessed electronically by the user of the account using standardauthentication procedures (e.g., a PIN). The electronic access to theIPA account can be accomplished through a PC, card reader, PDA,Interactive TV and cell phone technology, for example. This restrictionprovides an added level of consumer protection in that the consumernever has to provide any of its account information to any strangers.The above described PPP (operated by the user) securely communicateswith the IPA account to initiate payments according to the presentinvention. One essential feature of the present invention, completelycontrary to the prior art, is that payments made from the IPA accountare transmitted to the payee as a credit over the secure EFT network. Asdiscussed above, only debit related transactions are currently initiatedon the EFT system. The EFT credit message of the present invention thusrepresent a significant advancement in art which has no peers withrespect to electronic commerce.

Similar to an IPA, the VPL is a limited function account. While an IPAcan be accessed electronically, a VPL is constructed with a “receiveonly” functionality that enables a merchant (or any party) to receiveelectronic payments through the EFT. Therefore a VPL is a secure addressthat can be provided to the public as a means of receiving funds. Thesefunds can then be automatically swept to either the user's correspondingDDA or IPA account, preferably once a day. As will be Further describedbelow, there are several types of VPL accounts according to the presentinvention: one for consumers, one for merchants and one that isinitially linked to a cash card as described below. The card VPL is areceive only account that can only be debited via the use of the cashcard and a PIN. The consumer and merchant VPLs can similarly be PINdebited to access the funds in the account. Unlike an IPA account, theVPL account cannot be used for initiating EFT credit messages. In oneembodiment of the present invention, the IPA and VPL accounts arelogically one account with two addresses for account. One address, (theIPA address) is only known to the user (and its issuing institution) andis used to make payments from the account. The other address, the VPLaddress, is used to receive electronic credits and can be freelypublished without any fear of fraud.

The Account Reporter is a portal for consumers or business to view thebalance and transaction history of an IPA or VPL account. In addition tothe features described above intended for use with an IPA account, theAccount Reporter includes special functionality intended for use bymerchants in association with their VPL accounts. The Account Reporterprovides online, real-time transaction reports, and reconciles accountsreceivable/purchase records against incoming EFT payment records. Inaddition, the transaction history of the VPL can be archived andretrieved via a payment search engine in the Account Reporter. Thisprovides the merchant with powerful data mining, customer service, andorder fulfillment (warehouse, shipping, supply chain management) toolsat their fingertips. Credit card purchases on the web according to priorart methods are not connected to a cash management program. In contrastto these prior art systems, the VPL, connected with the AccountReporter, offers a complete purchasing and cash management opportunityfor a merchant. The VPL and Account Reporter combination provides amerchant with instant payment receipt verification, accounts receivablefunctionality, order fulfillment facilitation, inventory control/supplychain management facilitation and data mining capability.

The Account Reporter is a flexible component offering instant paymentconfirmation, reconciliation and record retention so that merchants cantrack purchase orders against actual payments in real time. Every VPLtransaction can be stored, searched, and retrieved. Thisarchival/retrieval functionality is the perfect instrument for customerservice and data mining. The Account Reporter offers all of the abovefeatures, without the need to actively engage in funds management as isrequired with the prior art.

Using the structures described above, the methods of the presentinvention allow consumers and businesses to conduct secure andeconomical shopping on the Internet, to pay anyone online, pay anyonefunds online, pay bills electronically online, and even use a linkedcash card. The methods and structures of the present invention enablee-commerce in both the virtual and physical marketplace through the useof legacy platforms, the conventional payments infrastructure andcurrently available web-based technology.

The present invention furthermore solves many, if not all, of theproblems of the prior art described above. Currently, all Internettransactions use “pull” technology in which a merchant must receive theconsumer's account number (and in some cases PIN number) in order tocomplete a payment. The payment methods of the present inventionconversely use “push” technology in which users (consumers orbusinesses) push an EFT credit from their IPA or DDA accounts to amerchant's account, without having to provide their own sensitiveaccount information.

The present invention provides an enhanced level of security becausesensitive financial information is not carried over the Internet. All ofthe financial transactions are executed through the secure EFT network.This method of the present invention provides buyers and sellers withthe comfort that their transactions are both secure and private.Furthermore, since payment confirmations are immediately receivedthrough the EFT network, sellers can rest assured that the buyer's fundsare “good” before the purchase transaction is completed (i.e., beforethe goods are released (shipped) to the consumer).

The present invention provides significant economic advantages over theprior art systems and methods. The majority of the technology requiredto implement the present invention already exists, which results inreduced startup costs for an institution practicing the presentinvention. Payments made according the present methods pass through amature, established EFT switch which results in a low transaction cost.The payment mechanisms of the prior art are not optimal for processingsmall dollar transactions. However, the efficient, low cost architectureof the present invention supports payments of any size and is perfectfor low dollar purchases. This architecture supports the growing needfor Internet micro-payments for goods such as on line articles and musicfiles, yet supports large value payments as well.

By the structures and methods of the present invention, the two mostsignificant disadvantages of the prior art online shopping methodsdescribed above have been overcome. First of all, the buyer (consumer orbusiness) is no longer providing its confidential financial informationto strangers over the Internet. Rather, the buyer is dealing directlywith its own trusted institution (in a preferred embodiment a bank).Furthermore, no pre-existing relationship has to exist between thecustomer and the merchant.

For the merchant, the present invention significantly reduces thetransactional cost as compared to the use of credit cards. The methodalso provides a reduction in fraud and credit losses, while the finalityof the transaction virtually eliminates dispute and chargebackprocessing from the viewpoint of the financial institution. Forfinancial institutions, the present invention all but eliminates thepotential of fraud that is inherent with credit card transactions. Asconsumers are typically only responsible for the first $50 of fraudulenttransactions, banks typically absorb the sometimes significant costsassociated with fraud. The ability for hackers to steal consumer'saccount numbers (e.g., credit card numbers) from an Internet merchant iscompletely eliminated since the merchant never receives suchinformation.

The present invention is not limited to the case of a consumer makingpurchases from Internet merchants or business to business transactions.The method has further, broader applicability by providing the abilityfor anyone with an account at an institution to transfer funds to anyoneelse who also has an account at the same or a different institution. Thepay anyone feature of the present invention allows parties toelectronically transmit funds instantaneously without the expense oftoday's wiring fees.

BRIEF DESCRIPTION OF THE DRAWINGS

For the purposes of illustrating the present invention, there is shownin the drawings a form which is presently preferred, it being understoodhowever, that the invention is not limited to the precise form shown bythe drawing in which:

FIG. 1 illustrates the prior art method of Internet payment processingusing debit and/or credit cards;

FIG. 2 depicts a first embodiment of the present invention that enablesInternet shopping;

FIG. 3 depicts a pay anyone embodiment of the present invention;

FIG. 4 illustrates a prepaid cash card embodiment of the presentinvention;

FIG. 5 illustrates a pay anyone embodiment of the present invention;

FIG. 6 illustrates a bill payment, biller direct embodiment of thepresent invention;

FIG. 7 illustrates a bill payment, service provider consolidationembodiment of the present invention;

FIG. 8 illustrates a bill payment, customer consolidation embodiment ofthe present invention;

FIG. 9 illustrates a structure and process for funding an accountassociated with an electronic Wallet according to the present invention;and

FIG. 10 illustrates an embodiment of the present invention in which EFTcredit pushes are funded by a user's credit card.

DETAILED DESCRIPTION OF THE INVENTION

In contrast to the credit card, on-line and off-line debit and otherpayment models existing today, one of the unique features of the methodof the present invention is the flow of the payment instruction and thepayment which follows. In the credit card, on-line and off-line debitmodels, a buyer provides a seller with an instruction that authorizesthe seller to collect funds from the buyer's account. Depending on thesystem, this debit instruction results in a guaranteed payment in thecase of an on-line debit rather than a lengthy wait for funds (such inthe case of a check) or something in between in the case of an off-linedebit and credit card. The difference between the prior art models andthe model of the present invention can be described as the differencebetween a “pull” and a “push” model. In the conventional models oftoday, the seller “pulls” the payment from the buyer's account using adebit instruction, while in the present invention the buyer “pushes” anEFT credit to the seller's account.

FIG. 2 illustrates a first embodiment of the present invention in whicha consumer (including businesses acting as consumers) can performInternet shopping. FIG. 2 further illustrates the main structuralcomponents of the present invention. Element 200 represents the devicethrough which the consumer accesses the Internet. In a preferredembodiment, the workstation 200 is a Personal Computer (PC) loaded withan Internet browser 210 such as Netscape™ Navigator™ or Microsoft™Internet Explorer™. In alternative embodiments, the user can access theInternet using any Internet ready device such as a web enabled ATMmachine or a Personal Digital Assistant (PDA) such as a Palm Pilot™, acell phone or an interactive TV. The present invention is not limited byany particular physical device and can employ any device that providesaccess to the Internet. For example a public kiosk which provides accessto the Internet can be used to practice the present invention.

As the user accesses the Internet using its Browser 210, a Wallet 215 islaunched by the user. The Wallet 215 can be downloaded and installedfrom a website. Using thin wallet technology, the majority of softwareand databases comprising the Wallet 215 resides on a host web server andthe user accesses the Wallet 215 through a website or a button (e.g.,icon) on the Browser 210. Some functionality of the Wallet 215 can beoperated on the workstation 200 itself, without the requirement ofattachment to the Internet. In addition to PC-based access as describedabove, the Wallet 215 can be downloaded to various non-PC devices suchas PDAs, cellular telephones, and interactive TV's. The consumer mayaccess the Wallet 215 while logged onto the Internet by selecting awallet button on the Browser 210 toolbar, or selecting a wallet icon atthe merchant's web site. For non-PC devices, the Wallet 215 can beactivated via a separate application, a browser link, or through asponsoring website. In a preferred embodiment of the present invention,a business, such as a bank, operates the server that hosts the Wallet215 Application Programming Interface (API). This embodiment providesfor additional security of the connection between the Wallet 215 and theuser's IPA 230 or other accounts maintained at the institution.

FIG. 2 depicts the preferred embodiment of the present invention inwhich the Wallet 215 incorporates all of the functionality of the PPP227 into a single component. Such a PPP enhanced Wallet 215 performs allof the conventional (e.g., form filling) functions of a traditionalwallet and further has the payment capability of the PPP 227 asdescribed below. As alternatively depicted in FIG. 3 (discussed below)the Wallet 215 can be the conventional form filling wallet with theappropriate interface to the PPP 227. In a third embodiment (illustratedin FIG. 5 discussed below), the Wallet 215 is not used at all, and thePPP 227 operates as a stand alone component for generating the paymentauthorization. The following discussion of the PPP enhanced Wallet 215,particularly in regard payment functions apply equally to the PPP 227when used as a stand alone component or when used in conjunction with atraditional wallet.

The user's log-in to the PPP enhanced Wallet 215 is secure and encryptedto protect the confidentiality of any financial information associatedwith the operation of the PPP enhanced Wallet 215. Once accessed, awindow containing the PPP enhanced Wallet 215 is launched on theworkstation 200 and remains open during the user's session. The PPPenhanced Wallet 215 window has the ability to communicate with otheropen browser windows. In a preferred embodiment, the users connection tothe PPP enhanced Wallet 215 is through the Internet. In an alternativeembodiment, the connection from the user's workstation 200 to the PPPenhanced Wallet 215 software can be through a separate dial up line orthird party private network.

As one of its primary functions, the PPP enhanced Wallet 215, though thefunctions provided by the PPP 227 serves as the portal to an InternetPayment Account (IPA) or a DDA account 230 described in more detailbelow. In a preferred embodiment the PPP enhanced Wallet 215 stores thefollowing types of information: Form filling information such as creditcard numbers, debit card numbers, shipping addresses, alternate shippingaddresses, frequent flyer accounts, membership discounts (e.g., AAA,AARP), loyalty programs and e-mail addresses; Discount information suchas e-coupons, rebates and merchant-specific spending certificates;Points or miles accrued for use of the accounts associated with the PPP227; and Convenience information such as frequently paid VPL #'s(described below), bill payment account #'s, receipts, e-commercebookmarks, shopping lists. A preferred download folder is installed onthe user's local hard drive. The PPP enhanced Wallet 215 has pull downmenus that are used to select, edit, update, sort, import and export anyof the above information.

Using the above information, the PPP enhanced Wallet 215 automaticallyfills in electronic merchant purchase forms with the user's shippingaddress, e-mail address, discount numbers, etc. The PPP enhanced Wallet215 supports virtual cash (IPA/DDA) payments in accordance with thepresent invention, traditional credit and debit card “pull” payments anda combination of the two types of payments as is further describedbelow. Upon receipt of an electronic purchase message from a merchantweb site 255 as will be further described below with respect to themethod of FIG. 2, the PPP enhanced Wallet 215 user is able to: 1)approve a purchase; 2) initiate the payment through a paymentauthorization to the consumer's bank 220; 3) verify the accuracy of themerchant's payee information (identification of the merchant's account235 at the merchant's bank 275); 4) generate a purchase confirmation 244that is transmitted to the merchant web site 255 or VPL reporter 240;and 5) generate a receipt that can be stored at the server hosting thePPP enhanced Wallet 215 or the user's storage (e.g., hard drive) onworkstation 200. The PPP enhanced Wallet 215 user receives aconfirmation message indicating that no purchase has been made if apurchase is not completed.

The PPP enhanced Wallet 215 includes a “Time Out” feature wherebypurchase requests not approved by a user for a set amount of time (e.g.10 minutes) will be invalidated. For “Pay Anyone” payments as furtherdescribed with respect to FIG. 3 below, the PPP enhanced Wallet 215supports a user defined recission period (e.g., 30 minutes) during whichthe user can reverse a transaction.

An additional feature of the PPP enhanced Wallet 215 are parentalcontrol settings. In establishing an IPA account, the user is given theopportunity to establish subordinate (child) IPA and/or VPL accountsthat are controlled by the main (parent) IPA account. For example aparent might want to establish an IPA/VPL account for each of itschildren. Through the IPA account linked to the parent's PPP enhancedWallet 215, the parent is able to view and control all aspects of thechildren's IPA/VPL accounts. For example, the parent might limit thefunding of the children's accounts such that they can only receive fundsfrom the parent's account. This will prohibit strangers from sendingmoney the children's accounts. The parent could also limit the amount ornumber of any transactions out of the account or limit (block) anypayments to unapproved VPL accounts (e.g., associated with unapprovedInternet sites)

Using functionality from online banking services, the PPP enhancedWallet 215 is able to be associated with (linked to) some or all of theaccounts maintained by the user at the bank 220. The user is thus ableto transfer funds, amounts, value, from one account to another (e.g., toan IPA account 230 from a savings account, or VPL account 235) withease. Although in the preferred embodiment of the present invention, theIPA 230 and VPL accounts are maintained at a financial institution(e.g., a bank), it is readily appreciated that any businesses that canattach to the EFT network 270 are capable of maintaining the accounts230, 235 and performing the operations of the present invention.

A unique transaction number is included in any payment communications toand from the PPP enhanced Wallet 215. All of the payment communicationsare stored by the PPP enhanced Wallet 215 for review and auditing by theuser. Examples of stored payment communications include payment messagesfrom a merchant or billers, payment authorizations from the PPP enhancedWallet 215 to the bank 220, and payment confirmations 244 to themerchant (255 or 240). The transaction number for a particulartransaction is included in each communication and allows for swiftcorrelation and indexing of communication records (e.g.,reconciliation). The PPP enhanced Wallet 215 interfaces with the AccountReporter described below, which will have access to all archivedtransactions. In a preferred embodiment, the payment communicationrecords are stored in a common database and both the PPP enhanced Wallet215 and the Account Reporter associated with (attached to) a particularaccounts are able to access the common database for these accounts.Transactions are stored for audit as well as disaster recovery purposes.The PPP enhanced Wallet 215 allows the user to view all transactionhistories including receipts and messages. These historical items aresortable by date, function (bill payment, pay anyone, shopping, etc.),amount, payments initiated or received, merchant, etc.

As is further described below, the PPP enhanced Wallet 215 isresponsible for initiating the push of the credit to the merchant'saccount 235. In order to perform the credit push over the EFT, the PPPenhanced Wallet 215 requires the merchant's payee information thatuniquely identifies the merchant's Virtual Private Lockbox (VPL) 235.This payee information includes the merchant's bank 275 identificationnumber (typically six digits) and the number of the VPL account 235(typically ten to thirteen digits). This payee information constitutesan address to which the Wallet 215 can push credits. Paymentcommunications from PPP enhanced Wallet 215 can additionally identifythe PPP enhanced Wallet 215 user's name (if required) and include theunique transaction number. The PPP enhanced Wallet 215 can make repeatedpayments (daily, weekly, etc) as well as scheduled payments (on aspecific calendar day or in a specific # of days). If the PPP enhancedWallet 215 is linked to a DDA account, DDA debits such as checks,returned checks, ACH payments, etc. are not charged against funds in theprimary IPA account 230 associated with the PPP enhanced Wallet 215.Users are required to acknowledge acceptance of a PPP enhanced Wallet215 agreement prior to their first transaction using the PPP enhancedWallet 215 including a requirement to return any proceeds received inerror.

Prior to conducting any on-line purchases or making any payments usingthe methods of the present invention, the consumer establishes anInternet Payment Account (IPA) 230 with its bank 220. Alternatively, aDDA account 230 can be used, but this is less preferable. For onereason, it is envisioned that only small payments are to be made fromthe IPA account 230 and accordingly less funds would be kept in theaccount as opposed to the funds normally maintained in a DDA account.

The IPA account 230 is a specialized account used specifically forelectronic commerce in accordance with the present invention. Once theIPA account 230 has been established, the user is able to fund thisaccount 230 from its normal DDA checking or savings accounts, consumer'sLine of Credit, or credit, or debit card account held by the bank 220 orany other account from which the consumer can transfer funds (e.g.,another DDA account or credit card account at another financialinstitution). The IPA account 230 provides the user with a confirmationcapability in order to verify that the amount drawn is correct. The IPAaccount 230 and the VPL account 235 (described below) both allow PINdebit transactions for withdrawals from the accounts.

In a preferred embodiment, the IPA account 230 is combined with a VPLaccount 235 into a single account. The IPA account functionality isaccessed through a first address to the account by which funds can betransferred out of the IPA account. Only the user has access to thisaddress and it is password and or PIN protected. If the user has severalIPA accounts, when the user accesses its PPP 227, a single password andor PIN procedure provides access to all of the user's accounts. The VPLfunctionality makes the single account appear as a receive only accountand is accordingly accessed through a second, preferably differentaddress. This second address can only be used for receipt of credits,preferably electronic credits according to the present invention. Sincethe second address can only be used to receive funds, the user canfreely publish the address without any fear of someone fraudulentlytransferring money out of the account. The VPL portion of the accountcan be accessed for PIN debit transactions as will be further describedbelow in connection with the physical card embodiment of the presentinvention (see FIG. 4)

The establishment of a separate IPA/VPL account 230 for electroniccredits and payments is preferable from a user's point of view in orderto provide a separate accounting from the user's normal DDA. As with itsregular accounts, a transaction history for the IPA 230 is archived. Asthe IPA account 230 is not necessarily interest bearing, it isenvisioned that the user would accordingly only fund small amounts intothis account in order to cover potential on-line purchases. The user canset up periodic (e.g., weekly) automatic funding of the TPA account 230.In an alternative embodiment of the present invention, the user'spayments in accordance with the present invention may be made directlyagainst a normal DDA account.

The IPA 230 or VPL 235 accounts can have physical companion card forphysical, in person, purchases and withdrawals as will be furtherdescribed below with respect to FIG. 4. Each of the IPA 230 and VPL 235accounts allow physical access via ATM's or merchant card readers forPIN debit transactions.

One of the most significant features of the present invention is the useof the existing EFT networks 270. Although these networks 270 haveprovided secure transfer of funds for years, the use of these networksin accordance with the present invention is heretofore unheard of. Inthe use of the EFT network, the present invention provides real timecredit. This is contrasted to the prior art debit message methods inwhich the only semblance of credit provided in a reversal of a priordebit transaction (e.g.; credit cards). The EFT networks 270 are used toeffect IPA transactions, fulfill IPA reporting functionality, and can beused to fund the IPA 230. As well as supporting the transmission of realtime credit messages, the EFT network 270 transmits messages containingspecial transaction codes and account and bank number structures(addresses) used to uniquely identify IPA transactions. Furthermore, theEFT network 270 can be used to verify the existence and validity ofdestination accounts as further described below.

As described above, similar to an IPA account 230, the Virtual PersonalLockbox (VPL) 235 is a limited function account. While an IPA 230 can beaccessed electronically for outgoing payment transactions, a VPL 230 isconstructed with EFT network “receive only” functionality. This featureof a VPL account (or a VPL address for a dual access IPA/VPL account)provides a merchant (or other party) to receive electronic credits(e.g., payments) through the EFT 270. In this manner a VPL 235 is asecure address that can be provided to the public as a means ofreceiving funds. Once received by a VPL account 235, funds can then bemanually or automatically swept by the merchant's bank 275 to one of theowner's other accounts 280 (e.g., a DDA or cash concentration account280). This sweep can be performed once a day, or more or less than oncea day as dictated by the needs and objectives of the VPL user.

Like an IPA account 230, the VPL 235 can have a physical companion cardfor physical, in person, purchases and withdrawals. The VPL 235 canallow physical access via ATM's or merchant card readers for a PIN debittransaction using a user only access (address) for debit transactionsfrom the VPL 235. Although providing the general function of an account(to hold funds), it must be repeated that the basic functionality of aVPL 235 is distinct from the IPA account 230 functionality. The VPL 235is a secure lockbox into which funds can be transferred but cannot betaken out (except during the sweeping process or other PIN transactionsdescribed herein).

In preferred embodiment of the present invention, VPL addresses forvarious merchants and other receivers of electronic payments are madeavailable in a public directory 325 (see FIG. 3). Since the ‘receiveonly’ address of a VPL account 235 is what is published in the publicdirectory, merchants and other users of the ‘receive only’ VPL 235 arealleviated of the fear of the fraud. In the preferred embodiment, thedirectory of VPL addresses 325 is maintained on an Internet accessibleserver or servers and accessed through a website that provides thecapability to search and select and retrieve VPL information.Alternatively, the directory 325 can be accessed by PDA, kiosk or byphone using voice recognition or other telephony technology. Thedirectory 325 can be used by the PPP enhanced Wallet 215 to verify theaccuracy of a VPL address before it commits to transferring a creditmessage to the account designated in the VPL address.

As described above, the address for an IPA 230 or VPL 235 consists of anidentification of the institution at which the account is held(typically six digits) and an identification of the account (typicallyten to thirteen digits). For consumers (the “white pages”), thedirectory 325 contains but is not limited to the VPL address, the lastand first name of the VPL consumer, the user's Post Office address,phone and email address. For businesses (the “yellow pages”), thedirectory 325 contains but is not limited to the VPL address, thebusiness name, the industry or type of business, the business' PostOffice address, phone and email address.

As briefly described above, the Account Reporter 240 is a portal to viewthe VPL account 235. The Account Reporter 240 provides online, real-timetransaction reports, and reconciles accounts receivable/purchase records250 against incoming EFT payment records 245. Although primarilyintended for use by merchants, much of the functionality of the AccountReporter 240 is incorporated in the PPP 227 Wallet 215. The PPP 227preferably include a base set of requirements for consumers, and theAccount Reporter 245 would contain added features required for merchantsand businesses (e.g., reconciliation of purchase records and paymentrecords).

The VPL account 235 updates the Account Reporter 240 as payment records(credit messages) and transaction numbers are received through the EFTmessaging system 270. At the same time, any purchase orders 250 (in theform of a record) and payment confirmations (see below) are passed tothe Account Reporter 240 from merchant and billing web sites. As seen inFIG. 2, the Account Reporter 240 is also capable of receiving purchaseconfirmations 244 from the PPP 227. Purchase confirmations 244 andpayment records 245 are retrievable, in real-time, from the AccountReporter 240. Account Reporter 240 users are able to view their recordswith respect to their VPL accounts 235 on the Internet. Although onlyone VPL account 235 has been illustrated in FIG. 2, it is understoodthat a merchant is able to simultaneously maintain several VPLs 235.Each of these VPLs 235 is capable of being accessed and viewed by thesingle Account Reporter 240, much like a consumer is able to associateseveral IPA/VPL accounts with its PPP 227 and is able to view theseaccounts using the PPP 227.

In addition to the functionality described above with respect to thebase features of the Account Reporter 240 (storing, reviewing, sortingtransaction histories), a merchant embodiment of Account Reporter 240includes additional functionality. A first of the additional functionsprovided by the merchant Account Reporter 240 is its reconcilingcapability that matches purchase requests 250 generated by themerchant's website 255 with shopper's purchase confirmations 244 and theEFT payment records 245. Any items that do not match are flagged by theAccount Reporter 240 as exceptions for review. The merchant AccountReporter 240 further provides for identification (ID) and passwordsecurity, offering varying levels of access authority to the users.

Additionally, the merchant Account Reporter 240 automatically updatesthe merchant's accounts receivable, inventory & fulfillment files. As afurther extension, Account Reporter 240 also has fulfillment servicecapabilities whereby information from a merchant's website 255 isconsolidated and communicated to a warehouse to initiate productshipment 260, as well as linked to United Parcel Service (UPS™), FederalExpress (FedEx™), or other shipping services for shipping execution. TheAccount Reporter 240 contains essential customer service tools such asthe ability retrieve/review electronic purchase orders/payments realtime, and in turn the ability to email or autofax copies of suchdirectly to customers. The Account Reporter 240 further provides datamining tools that collect statistics on buyer/shopper behavior, trackseasonal and regional buyer/shopper trends, and track other keydemographics. Based on these statistics, merchants can issue focused,customized electronic coupons through their Account Reporter 240.

In one embodiment of the present invention, the user of an IPA account230 can specify whether or not the credits it pushes from the IPAincludes any identification information at all (e.g., account number,name . . . ) One of the features of the electronic credit pushes of thepresent invention is that the credit pushes can be made completelyanonymously, with the recipient of the credit having no way to determinefrom where the credit originated. The recipient of the credit is able tomatch the received credit with a proposed purchase using a transactionID that is contained in the EFT credit push. In the Internet shoppingembodiment described below, the Internet merchant provides the buyerwith the transaction ID and the buyer includes the transaction ID in theEFT credit message sent to the Internet Merchant's VPL account.

If the user is less concerned with privacy, the user can include apartial or complete identification of itself in the credit push. If thecredit push received by a VPL 235 does contain some identificationinformation, the Account Reporter 240 can be configured such that theidentities of individual buyers will not be available to the AccountReporter 240 without the prior consent of the user who initiated thecredit to the VPL 235. For consumers, the Account Reporter 240 appearsas a seamless part of the PPP 227, while for merchants and businesses,the Account Reporter 240 appears as a separate utility.

Merchant Web sites 255 are well known to those skilled in the art.Merchant Web sites 255 typically include code (such as HTML, XML, orECML) for getting transaction BIN statements (payment messages) to theWallet 215. As further described below these payment messages typicallycontain the merchant's VPL 235 address which includes the address of themerchant's bank 275. The payment messages enable the consumer to push acredit from its IPA account 230 through the EFT system 270 to the VPLaccount 235. Merchant's websites 255 can provide a hotlink on theshopping site 255 that goes directly to shopper's PPP enhanced Wallet215.

Having described the structural elements of the present invention, thefollowing discussion illustrates an embodiment of the present inventionrelated to Internet shopping. As in all of the remaining FIGS. 2-9, themethod steps are illustrated in the Figures in small circles next to thestructural element most closely related to the action being performed.In this embodiment, the consumer (user) initiates the process in step 2Aby logging onto the Internet, launching the Browser 210 and selectingthe PPP enhanced Wallet 215 icon from Browser 210 toolbar. The PPPenhanced Wallet 215 does not have to activated until the user actuallywishes to buy something, but the PPP enhanced Wallet 215 could alsocontain lists of links to a user's favorite shopping sites (or billingsites as is further described below).

In step 2B, the user completes a certification procedure 205 in order tocorrectly identify him or herself to the PPP enhanced Wallet 215.Typically the certification process involved the user keying in theuser's ID and password on the keyboard associated with the workstation200. The user is thus authenticated and has access to their PPP enhancedWallet 215. In step 2C, the user is then presented with balanceinformation with respect the IPA accounts 230 associated with the PPPenhanced Wallet 215 and can select from several options. In a preferredembodiment the options presented to the user include: Shop on the Web;Pay Anyone (see FIGS. 3 and 5); Fund Accounts (see FIG. 9); Pay Bills(see FIGS. 6-8); and View Account Activity.

Assuming the user has selected the Shop on the Web option in step 2D,the Browser 210 could be initially directed to special website list ofapproved merchants (which can also contain the VPL addresses for suchmerchants). Alternatively, the user is free to navigate the Internet tothe merchant web site of their choice. In step 2E, the user has found awebsite 255 of a particular merchant and more specifically has found andselected an item for purchase from merchant web site 255. Since the PPPenhanced Wallet 215 is active, the merchant's site 255 recognizes useras a PPP enhanced Wallet 215 customer. In response to this recognition,all of the purchase fields (shipping address, name, etc.) required bythe merchant site 255 are automatically populated from the PPP enhancedWallet 215 as described above. Alternatively, the user can sign on totheir PPP enhanced Wallet 215 after the user has found an item at awebsite for purchase. The user can either invoke the PPP enhanced Wallet215 by clicking on an icon embedded directly into the merchant's webpage 255, or by clicking on a wallet button on the Browser 210 toolbar.

In step 2F, the merchant site 255 generates and transmits to the user abill payment message containing information with respect to theprospective purchase. The information provided by the website 255 in thebill payment message includes but is not limited to the following data:Merchant BIN; Merchant Account #; Transaction ID; and the Dollar Amountof the transaction. In step 2G the bill payment message is received bythe Wallet 215 window. A window displays the bill payment message forreview by the user. If the user changes his or her mind, the user canselect a button on the window entitled Decline Purchase. If the userdoes want to complete the purchase, a Purchase Item button is selected.Although described above with respect to a single item, it is clear thatthe above process equally applies the shopping cart method employed bymost merchant sites 255. In the shopping cart method, after the customerhas selected a number of items to purchase, the merchant site 255 totalsthe items and transmits a consolidated payment message to the PPPenhanced Wallet 215 in step 2F.

If the user has selected to purchase the item pursuant to the billpayment message from the merchant site 255, the PPP portion 227 of thePPP enhanced Wallet 215 in step 2H first verifies the user's balance inthe primary IPA account 230 associated with the PPP enhanced Wallet 215.If there are insufficient funds in the IPA account 230, the user isasked if he/she would like to transfer funds from another account intothe IPA account. Using online banking procedures, the PPP enhancedWallet 215 is able to transfer funds from any account accessible by thePPP enhanced Wallet 215 into the IPA account 230. If there aresufficient funds in the IPA account 235, the PPP 227 generates a paymentauthorization message for transmission to the bank 220. The paymentauthorization message 225 contains the above described payee information(merchant VPL account and bank address) and can also contain a userdefined memo field for entry of any information desired by the user(e.g., “payment for new mystery book”).

In addition to generating and transmitting the payment authorization225, the PPP 227 transmits a purchase acknowledgement directly to themerchant's website 255. Typically, in response to this purchaseacknowledgement from the user's PPP 227, the merchant's website 255creates a purchase record 250 in a database (not shown) for future usein reconciling with the actual payment confirmation 244 and/or paymentrecord 245. As illustrated in FIG. 2, the PPP 227 also send a paymentconfirmation 244 either to the website 255, or the merchant's AccountReporter 240. In the preferred embodiment, the payment confirmation 244is in the form of an electronic message (e.g., an E-mail) to the AccountReporter 240. The payment confirmation 244 can be sent either before orafter the PIT 227 has actually transmitted the payment authorization 225to its bank 220, without any confirmation from the bank 220 that thepayment was actually transmitted via the EFT network 270. Alternatively,the PPP 227 can wait until it has received confirmation from the bank220 that the EFT credit message was actually sent through the EFTnetwork 270.

In the preferred embodiment the banks 220, 275 which maintain IPA 230and VPL accounts 235 also maintain the above described database that isused as a centralized record keeping archive in order to feed andretrieve transaction data. Such transaction data includes but is notlimited to payment authorizations 225, payment confirmations, and therecords required for the Account Reporter 240 including EFT transactiondata.

In addition to the payment acknowledgment sent to the merchant's website255, and the payment confirmation sent to the Account Reporter 240, thePPP 227 transmits the payment authorization 225 to the user's IPAaccount 230 to effectuate the actual transference of the funds from theuser's account 230 to the merchant's account 235 via an EFT creditmessage on the EFT system 270. The consumer's bank 220 will require someform of authentication of the payment authorization from the PPP 227.This authentication can be in the form of a software certification, anencrypted PIN, or the mother's maiden name of the consumer. Once thebank 220 has authenticated that the message truly originated from theconsumer, the bank 220 can then fulfill the payment authorization 225.

Upon receipt of this authorization for payment 225, in step 2I, theuser's bank 220 debits the user's IPA account 230 to generate an EFTcredit message in the amount of the authorized payment. As describedabove, the EFT credit message is completely different from traditionalEFT messages that are debits or the reversals of debits. Once generated,the EFT credit message is transferred to the merchant's VPL account 235via the ATM switch 270. Although the credit instruction is illustratedin FIG. 2 as being processed directly by the accounts 230 and 235, it isappreciated that the records are actually processed by the messagingsystems and processors of the user's bank 220, the merchant's bank 275and the EFT network 270. The EFT credit message is essentially aguarantee of payment from the user's bank 220 (the funds being debitedfrom the user's account 230) to the merchant's bank 275 (the funds beingcredited to the merchant's account 235). Settlement between banks 220and 275 typically occurs once a day with respect to all outstandingcredits and debits between the banks 220, 275, although the cash isavailable from the VPL account 235 upon receipt of the EFT creditmessage.

After the EFT credit message has been received by merchant's VPL 235,the receipt of the credit is detected by the merchant's Account Reporter245 (step 2J). In response to the detection of the credit, the AccountReporter 240 preferably generates and stores a payment record 245 in thesame database in which the purchase record 250 was stored in step 2Hdescribed above. Although only a single payment record 245 has beenillustrated in FIG. 2, it is appreciated that two payment records 245can exist for a single payment transaction. The first payment record 245can be generated upon the receipt of the payment confirmation 244 fromthe user's PPP 227. The second payment record 245 can be generated uponthe actual receipt of the EFT credit over the EFT system 270.

Once the payment record 245 has been stored, it can be reconciled by theAccount Reporter 240 against the merchant's purchase record 250 (step2K). In this manner, the accounting loop in the merchant's system can beclosed, with the matching of the merchant's invoice (the purchase record250) with the payment (the payment record 245). Alternatively, theAccount Reporter 240 can reconcile the above described two paymentrecords (one generated from the payment confirmation and one generatedfrom the EFT credit message) against the purchase record 250. WithAccount Reporter 240, a merchant has a product that allows for securetransaction fulfillment, reconcilement ability, record-keeping andarchive possibilities. Once the financial loop has been closed with thereceipt of the payment record 245 by the merchant, the merchant canconfidently ship the goods 260 to the consumer in step 2L. Shipment ofthe goods can entail physical shipment of a physical good, or electronictransmission of a digital good such as a music file.

In fulfillment of the guarantee established by the EFT credit message,funds are settled once a day in step 2M between user's bank 220 and themerchant's bank 275 through the EFT switch 270. Typically, hundreds orthousands of such payments occur back and forth between bank 220 andbank 275 during the day and for efficiency purposes, the actual netfunds due from one bank to the other are only transferred once per day.For example, one bank 220 might have guaranteed $10,000 in EFT creditmessages from one hundred of its customers to the other bank 275. On thesame day the other bank 275 might have guaranteed $12,000 in EFT creditsfrom fifty of its customers to the other bank 220. At the end of theday, bank 275 only sends the difference, $2,000, to bank 220 and each ofthe banks 220, 275 ensure that the proper accounts in its own bank aredebited and credited for the payments. As can be readily appreciatedeach bank performs this end of day settlement with hundreds of otherbanks, as is presently done with the current ATM system 270 transfer offunds. Again on a daily basis, the funds received into the merchant'sVPL account 235 are swept by an automatic process into the merchant'scash concentration account 280, which can be a DDA or IPA account.

As is readily appreciated from the above description, the PPP enhancedWallet 215 and the Virtual Private Lockbox (VPL) 235 significantlyenhances the consumer and merchant experience when used for webshopping. The present invention completely solves one of the biggestproblems of the prior art, the hesitancy of a consumer to providefinancial account information over the Internet. Rather than themerchant “pulling” in the consumers account information and requiringauthentication of the consumer, the PPP enhanced Wallet 215 “pushes” anEFT credit message to the merchant's Virtual Private Lockbox, withoutthe merchant ever obtaining the consumers account information. Thistransaction is virtually instantaneous, provides privacy, security, andconvenience to the consumer—and guarantees funding, providesreconcilement, and supplies archival records to the merchant.

With respect to authentication, because the consumer is pushing thepayment to merchants or other entities or individuals, rather than themerchants pulling payments from consumer accounts, the consumers do notneed to authenticate themselves to the merchant. Rather, the consumersauthenticate themselves to their own bank 220, which then executes theEFT credit payment to the merchant's VPL account 235.

This method of the present invention is quite attractive to consumersbecause they can pay any merchant regardless of the existence of apre-existing relationship with that individual or entity. Thetransaction can furthermore be conducted from anywhere there is accessto the Internet. The IPA account 230 can be used and managed through theconsumer's PC, a web enabled ATM, by phone or by any other web enableddevice. The present Internet shopping payment method is extremely easyfor online banking customers to adopt. The method allows consumers toconduct online shopping without having to provide any personalconfidential financial information to unknown merchants. The methodallows consumers to conduct these financial transactions solely with heror his own financial institution.

With respect to merchants that are paid by the method of the presentinvention, there are several advantages. This method opens up a universeof buyers/payors who do not have access to or the desire to use creditor debit cards online. Very little effort is required on the part of amerchant which only has to publish its bank 275 and VPL deposit onlyaccount 235 information on its web site 255 or other public directory(see 335 in FIG. 3). If a merchant has been using traditional creditcard methods, the present invention provides the merchant withsignificant savings in credit card processing, repudiation costs, fraudloss, and chargeback costs. The present invention also provides themerchant with the ability to economically accept micropayments.

FIG. 3 illustrates a second embodiment of the present invention in whichthe structures described above can be used by a user to pay anyone. ThePPP 227 of the present invention provides the user with tremendousflexibility. Anyone with using a PPP 227 can conveniently send funds toanyone else with an IPA/VPL account. This funds transfer isinstantaneous and at no cost to the consumer, and is conducted in asecure environment.

As described above with respect to the Internet shopping modelillustrated in FIG. 2, in the pay anyone model of FIG. 3, in steps3A-3C, the user logs onto the Internet, launches its browser (not shownin FIG. 3) and launches the Wallet 215. In the embodiment of FIG. 3, theWallet 215 is a traditional Wallet with the appropriate interface to thePPP 227. When the user wants to activate the PPP 227, the user isrequired to key in its user ID and password, by which the user is thenauthenticated and has access to their the accounts 230 associated withthe PPP 227. The user is then presented with its account balanceinformation and can select from several options including Shop on theWeb, Pay Anyone, Pay Bills, Pay Anyone, Fund Wallet, Review AccountActivity, Edit Wallet information, or Go to Customer Service.

In the present embodiment illustrated in FIG. 3, the user selects thePay Anyone option from the menu and the user is presented with severaloptions in the Pay Anyone menu screen in step 3D. These options include:manually keying in the payee's VPL number; selecting a prior payee froma drop down menu; Add/Remove/Edit a payee from drop down menu; and theoption to go to an online directory (325) of VPL numbers of variouspayees. In the particular embodiment illustrated in FIG. 3, the userkeys in (or selects) the payee's VPL address, the dollar amount of thepayment, and a description of the reason for the payment, thedescription being optional.

In step 3E, the above described payment information is transmitted topayee's Wallet 315 (or PPP 227, not illustrated). The payee's Wallet 315verifies the VPL number specified by the user and provides anauthorization to make the payment. In step 3F, the payee's Wallet 315confirms that the information is correct and transmits to the user(payor) a payment message with the following data: Payee BIN; PayeeAccount #; Transaction ID; the dollar amount of the payment; and anoptional description. In step 3G, upon receipt of the payment message,the user reviews the message and selects “OK to Pay”. Step 3D through 3Gare an optional process since the PPP 227 can unilaterally initiate thepush of an EFT credit message without ever having contacted the receiverof the credit. In such a blind push of a credit it is recommended thatthe PPP 227 consult an online directory 325 to verify the accuracy ofthe address to which the EFT credit message is to be sent.

In step 3H, the user's PPP 227 sends the payment authorization 225 tothe user's IPA account 230. In parallel, the user's PPP 227 transmits apayment confirmation of the expected payment to the payee's Wallet 315or Account Reporter 340 which creates an expected payment record 350.The user's PPP 227 goes through the certification as described above inorder for the user's bank 220 to properly identify the paymentauthorization 225. In step 3I, the EFT credit message is passed fromuser's IPA account 230 to the payee's VPL 335 via the ATM switch 270. Asdescribed above, the payee's VPL 335 may actually be the receive onlyaddress of an IPA account maintained by the payee.

In an alternative embodiment, a verification message is first sentthough the EFT network 270 to the destination account 335. The purposeof this verification message is to verify the existence and identity ofthe VPL account 335. In response to the receipt of the verificationmessage (assuming the VPL address was accurate and the message wasreceived), the VPL account sends back a response message that includes atext description of the owner/user of the VPL account 335. This responsemessage is then displayed to the user via the PPP 227 so that the usercan verify that the account 335 to which it is about to send a credit isactually owned/used by the party to which the user intend to send thecredit.

This verification procedure can be used in the Internet shopping modeldescribed above with respect to FIG. 2. In fact, the verificationprocedure is useful in thwarting any attempts at hacking of the VPLaddress transmitted (step 3F in FIG. 3 and step 2F in FIG. 2) via theInternet in the payment message from the merchant (255 in FIG. 2) orother payee (represented by Wallet 315 in FIG. 3). For example, if thepayment message originated from Amazon™ and included Amazon's VPL 335address, the verification procedure described above through the secureEFT 270 network would inform the user that the owner of the VPL 335 wastruly Amazon. If a miscreant (e.g., Joe Hacker) had intercepted thepayment message and inserted its own VPL address, the response messagein accordance with the verification procedure will visually inform theuser that the VPL address to which it will send the credit is owned byJoe Hacker. At this point the user can abandon the transmission or theEFT credit and try and identity Amazon's true VPL address.

In an alternative verification procedure, the PPP 227 can echo back tothe sender of the payment message (merchant 255 in FIG. 2 or Wallet 315in FIG. 3), the VPL address contained in the payment message. The sendercan then verify for itself that the user has the correct VPL address towhich to send the credit. This alternative verification process requiresthe hacker to intercept and alter two separate messages. Although betterthan no verification, the alternative procedure is still not asattractive as the EFT network 270 verification as it occurs in theunsecured Internet space.

Returning to FIG. 3, in response to the receipt of the EFT creditmessage by the payee's VPL 335, a payment record 345 is generated (step3J). Upon the receipt of the payment record 345, the payee's Wallet 315or Account Reporter 340 in step 3K is able to reconcile the expectedpayment record 350 against the actual payment record 345. Further inresponse to the receipt of the EFT credit message, the payee bank 375credits the payee's VPL account 335 and the payee now has immediate useof funds. These funds can in turn be used for web shopping, billpayment, pay anyone, or can be withdrawn at an ATM using the cardfeature described below.

In concluding the pay anyone process, as with the embodiment illustratedin FIG. 2, funds are settled once a day between the user's bank 220 andthe payee's bank 375 (step 3M), and the funds can be swept into thepayee's DDA or other IPA account 380 (step 3N).

The pay anyone process described above is a very attractive paymentmethod for consumers. For example, the consumer might be responding to aclassified advertisement (electronic or traditional paper) or purchasingan item or a service through an electronic auction site such as eBay™.In either of these cases, the consumer can obtain the payee's VPLaccount 335 information (e.g., BIN, account number . . . ) in a varietyof ways. In one method, the consumer obtains this informationelectronically from the service where it contacted the individual (e.g.,through eBay™). Alternatively, the consumer can obtain the necessarydestination account information through offline methods such as thetraditional paper classified advertisement or through an Email which hasbeen “pushed” to the consumer by the potential payee. The potentialpayee is protected using these methods since the VPL account 335 is areceive only account and no one can access the account to fraudulentlywithdraw money from the account. The user can furthermore obtain thepayee information from the online directory 325, from a pull down menuon the Wallet 215 or by keying in the information manually.

FIG. 4 illustrates an embodiment of the present invention involving aphysical card associated with a VPL or IPA account. In this embodiment,the physical cards are linked to IPA or VPL accounts containing aninitially established pre-set amount of cash. The card is issued to theIPA or VPL account user in order for the user to access the IPA or VPLaccount in the physical world. Furthermore, the cards can be purchasedat vending machines placed in convenient e-commerce locations Or otherdistribution outlets such as at the mall, convenience stores, or banks.In a preferred embodiment, when a user establishes a traditional Wallet215, the user is offered an option to establish an IPA/VPL account,receive a PPP enhanced Wallet 215, and receive a physical cardassociated with the IPA/VPL account. Upon selecting this option, thecard is mailed to the IPA/VPL user.

In the vending machine embodiment, the card is purchased from thevending machine with pre-funded with set increments of currency. Theseincrements are associated to specific account number ranges, and arelinked to IPA/VPL accounts. In one embodiment, the physical card ispre-activated (i.e., ready for immediate use). Alternatively, the cardcan be automatically activated upon its disbursement from the machine,or by the consumer making a toll-free call to a customer service line,or activated upon the user's first use of the card. The purchase of acard at a vending machine establishes a IPA/VPL account for thepurchaser. As an alternative to the preset association of a card to anaccount and dollar amount, the association of the card to the accountand the funding of the account can be accomplished dynamically as theuser is purchasing the card.

Once purchased, the cards can be accepted at ATM's and merchants thatare outfitted with card readers. Since the cards are PIN protected, theyare safer than cash. The card has the IPA/VPL account number as well asa PIN. The PIN is printed on a sticker affixed to the back of the cardwhen the card is issued. The account number is stored on the magneticstripe on the back of the card. The VPL portion of the accountassociated with the card can receive EFT credits as described above andcan funded from other accounts as also described above. The card can beused to withdraw funds at an ATM and make purchases from any merchantsthat accept debit cards.

For card purchased by someone who did not previously have a IPA account,in order to subsequently use EFT credit pushes as described above, thecard owner will be required to establish an IPA account with the sponsorof the card. For example, if the sponsor was a bank, the user signs ontobank's website, the new card owner keys in the card number and PIN tosynchronize the VPL with a newly created IPA account for the user. Thissynchronization will add the IPA account to the card link. The user canthen specify against which account portion, IPA or VPL, debits will bemade when using the card. The user will also be asked to indicatewhether any funds received by the VPL will be swept to the newly createdIPA or to an existing DDA account.

One specific embodiment purchasing and using a physical card isillustrated in FIG. 4. In step 4A, the purchaser selects a card fromeither a vending machine 400 or a vending enabled ATM (not shown) orother distribution outlet. In a preferred embodiment, cards can bepurchased for as little as a $1, or in larger ATM-like increments. Aftermaking a selection, the purchaser is prompted to pay for the card.Several purchasing options are available, including cash, debit cardsand credit cards.

In step 4B the card is disbursed from the machine 400 with apre-assigned PIN as well as instructions for using the card. The card iseither pre-activated or alternatively, the dispensing machine 400 sendsan activation message to the card sponsor upon its purchase, or the cardis activated upon its first use, or the user can phone in to activatethe card. The distribution outlet (e.g., vending machine) also providesthe purchaser with a printed receipt that can be used in the event thatthe user loses the physical card.

With the card in hand, the user is able to withdraw funds from theaccount associated with the card or making store purchases using thecard. In step 4C, the card owner inserts the card into an ATM machine430 or a merchant card reader at a merchant's Point Of Sale Location.The user then keys in the PIN number to identify her or himself as theproper owner of the card. In step 4D the merchant's card reader, whichis connected to the EFT network 270, transmits a debit message throughthe EFT switch 270 to the sponsoring bank 410.

As similarly depicted in FIG. 2, the debit message is seen as beingreceived directly by the user's VPL account 420, but in practice, it isrealized that all EFT messaging occurs through the systems of the bank410. The message is transmitted to the bank 410 as an online PIN debittransaction against the user's VPL account 420. Upon verification thatthere are sufficient funds available in the VPL account 420 associatedwith the requesting card, the transaction is authorized by the VPLsponsor 410 and the funds are deducted from the balance in the VPLaccount 420. In step 4E, the authorization message is transmitted backto the ATM or POS 430 through the same EFT network 270 and the funds arereleased to the card owner (in the case of an ATM withdrawal) orcredited to the merchant (store purchase) in step 4F.

FIG. 5 illustrates an embodiment of the present invention in which theuser can instantly transmit funds to anyone, specifically some one witha card and VPL account as described above. The payee (recipient of thefunds) can withdraw the funds via an ATM through the use of the physicalcard, which the payee can either purchase at a vending machine orreceive by mail when establishing an account, as described above. Aswith all of the embodiments of the present invention, this pay anyonefeature ensures that the transaction is conducted in a secureenvironment.

As described above with respect to the embodiments of FIGS. 2 and 3, inthe pay anyone method of FIG. 5, in steps 5A-5C, the user logs onto theInternet, launches its browser (not shown in FIG. 5) and launches itsPPP 227. As readily appreciated in FIG. 5, a traditional Wallet 215 isnot required to practice the essential features of the presentinvention, as these features are enabled by the PPP 227. In FIG. 5, thePPP 227 operated as a stand alone component. The PPP 227 requires thatthe user keys in its user ID and password, by which the user is thenauthenticated and has access to their PPP 227. The user is thenpresented with its account balance information and can select fromseveral options including Shop on the Web, Pay Anyone, Pay Bills, FundWallet, and Check Account Activity. In the present embodimentillustrated in FIG. 5, the user in step 5D selects the Pay Anyone optionfrom the menu and is prompted for the VPL number of the accountassociated with the card. The procedure set forth above with respect tothe pay anyone method of FIG. 3 is then followed.

In step 5E, user's PPP 227 generates a payment authorization with thefollowing data: Payee BIN; Payee VPL number (card number); TransactionID; and dollar amount. After reviewing the information, the user thenselects “OK to Pay” on the workstation 200 screen (e.g., PC, PDA . . .). In step 5F, the user's PPP 227 verifies the balance in the IPAaccount 230 and passes the payment authorization to IPA 230 if there aresufficient funds in the account 230 to cover the transaction. As anoptional step, the payee information is validated (i.e., the VPL accountassociated with the card is valid and is owned by the intended payee).In step 5G, the EFT credit message is passed via the ATM switch 270 fromuser's bank 220 (IPA account 230) to the payee's bank 575 (VPL account535).

The payee can withdraw the funds via an ATM 500 through the use of thephysical card as described above. When the withdrawal is requested, adebit payment message is transmitted in step 5H from the payee's VPLaccount 535 to the ATM 500 provider bank (not shown). The payee now hasimmediate use of funds, and the withdrawal is made in step 5I.Alternatively, the payee can use the card at a POS using the abovedescribed PIN debit procedure. As with the previous embodiments, fundsare settled once a day between the payor's bank 220, the VPL user's bank575, and the ATM 500 provider bank.

The present embodiment is well suited for many different situations. Forexample, if a parent has a son or daughter away at college, the parenthas provided the child with a card and associated VPL account 535, andis able to transfer funds to the child's account 535 in a simple, quickand cost efficient manner by use of the present invention. Those skilledin the art will appreciate that the above embodiment can be used by acustomer of the bank to transfer funds to anyone, such as the customer'sgardener or a child at college as described above.

FIGS. 6, 7 and 8 illustrate three different bill paying embodimentsaccording to the present invention. FIG. 6 depicts a direct bill payingembodiment, FIG. 7 describes bill payment including a service providerperforming consolidation, and FIG. 8 explains a bill payment method inwhich the customer performs the consolidation. In FIG. 6, the directmethod, a biller establishes an e-billing capability on its own web site255. Once enrolled in the service, the customer receives an e-mailnotification that a bill is available for payment at the biller's website 255. Alternatively, the customer can receive a traditional paperbill. The customer launches its Wallet 215, Browser 210 and PPP 227 andthen accesses the biller's web site 255. A payment is then eventuallytransmitted from the PPP 227 to the biller's Virtual Private Lockbox235. As in all of the embodiments of the present invention, thetransaction is secure, protects the customer's privacy, and provides thebiller with guaranteed funding, reconcilement, and archival records.

As is illustrated in FIG. 6, the biller/merchant first establishes ane-billing relationship with its customer. One way in which the merchantmight do so is to advertise its e-billing service via e-mail, mail, oron the Internet. In step 6A, it is assumed the user has enrolled in thec-bill service at biller's web site 255 and is receiving monthly Emailnotification when bills are available. As previously described, in step6B the user logs onto the Internet, launches its browser 210, Wallet 215and PPP 227 and is presented with the various menu options. In step 6C,the user selects the “Pay Bills” option and is given several options inthe Pay Bills menu screen including “Pay Bills” and “Edit Billinginformation”. Selecting the “Pay Bills” choice, the user navigates tothe biller's web site 255. It must be recalled that the Wallet 215already contains user's billing info.

Since web Wallet 215 is active, biller's website 255 recognizes the useras a Wallet 215 customer. In addition, the biller's website in step 6Dverifies that customer has an established e-billing relationship. Instep 6E, the biller's site 255 generates and transmits to the user abill payment message that includes the following data: Biller's BIN;Biller's Account number; Transaction ID; and the dollar amount of thebill to be paid. In step 6F, the bill payment message is received by theWallet 215 window and is displayed for review by the user. The user hasseveral options including at least the choice to edit the bill (e.g.,the amount to be paid) or the option to pay the bill as presented.

If the user selects the “pay the bill” option, the PPP 227 verifies theuser's balance in its IPA account 230 and passes the paymentauthorization 225 to the IPA account 230 while simultaneouslytransmitting a payment confirmation 244 to the biller/merchant's website255 or VPL Reporter 240 (step 6G). As alternatively shown, the PPP 227can transmit the payment confirmation 244 to the biller/merchant'swebsite 255 or VPL Reporter 240. In response to the receipt of thepayment authorization 225, the EFT credit message is passed from theuser's IPA account 230 to the biller's VPL account 235 via the ATMswitch 270 (step 6H). A bill payment record 245 is then generated andstored by the biller's Account Reporter 240 in response to the receiptof the credit message from the EFT network 270.

In step 6J, upon generation of the payment record 245 which reflects thereceipt of the funds to settle the bill, the payment record 245 isreconciled against the biller's accounts receivable files 600. Aspreviously described, with the VPL account 235 and the Account Reporter240, a billing merchant can execute secure transaction fulfilment,reconcile all its accounts, while securely archiving all its records forlater, simple retrieval. As described above with respect to otherembodiments, funds are settled once a day between user's bank 220 andthe biller's bank 275 (step 6K). The funds can be swept to the biller'sDDA or cash concentration account 280 (step 6L).

FIG. 7 depicts a further bill payment method involving service providerconsolidator. This bill payment method is similar to the firstillustrated in FIG. 6, however in this method a central service providerconsolidates e-bills from many different billers 700. The serviceprovider's site 755 enables a customer to review and pay bills withrespect to several if not all of its billers (e.g., electric bill, phonebill, mortgage . . . ). The service provider is seamlessly outfittedwith an archival capability, so that customers can review their billpayment history. The PPP 227 and IPA 230 once again provides theconsumer with privacy, security and convenience while the VPL providesthe service provider (and its customers, the biller/merchants) withguaranteed funding, reconcilement and archival records.

In step 7A, the user enrolls in the e-bill service at web site 755 ofthe Customer Service Provider (CSP). The e-billing relationship betweenthe CSP and the user is established either directly in response toadvertising by the CSP or though the billers 700 (customers of the CSP)advertising the services of the CSP to the users (who are customers ofthe billers). While enrolling (or at a later time) the user selectswhich bills it wishes to receive and pay electronically through theCSP's service. The CSP can offer an archive service to billers 700 inorder to store transaction history as well as providing a customerservice unit to resolve transaction inquiries.

After enrollment, the user then begins to receive monthly emailnotification when bills are available from the billers 700 chosen by theuser. The e-bill can be sent to the user either by the CSP or directlyfrom the biller 700 to the user. In this second method, the biller mustprovide the CSP with an accounts payable file reflecting the e-bills itsent out, in order for the CSP to perform the below describedreconciliation process for the biller 700. If the CSP is the partytransmitting the e-bills to the users, the billers 700 must provide theCSP with the billing information. Many types of record keeping methodsare supported. The billers 700 can push the billing information directlyto the CSP's web site, or alternatively, the electronic bills can bechanneled to the CSP via Spectrum or other electronic Internet billpayment aggregators.

Steps 7B and 7C are essentially the same as described above with respectto the direct bill paying embodiment of FIG. 6. The only difference isthat after choosing the “Pay Bills” option, instead of navigating to thebiller's site directly, the user navigates to the CSP's web site 755. Instep 7E, the user selects which bills to pay, and keys in the dollaramount to be paid on each bill (or selects the default, which is to paythe entire amount of the bill that was presented to the user). In step7F, CSP site 755 generates and transmits to the user one or more billpayment messages. In one embodiment, the CSP generates a single paymentmessage that includes the appropriate payment information for all of thebills paid during the session. In an alternative embodiment, a separatepayment message is generated for each of the bills paid by the user. Ineither embodiment, the message would include: the CSP's BIN; the CSP'sVPL account number; a transaction ID (or IDs); the biller(s) names) andthe dollar amount(s).

Steps 7F through 7L are essentially the same as described above withrespect to steps 6F through 6L of FIG. 6 and the elements that are thesame shall not be repeated. Although only a single VPL account 735 isillustrated in FIG. 7, it is appreciated that the CSP (or the billersdirectly) may maintain a VPL account 735 for each biller. Regardless ofwhether there is a single VPL 735 or several, the billers 700 themselvesmay view the contents of their receipts in the VPL 735 through the CSP'sAccount Reporter 740. In step 7J, the CSP performs the reconciliationprocess for each of its customers (i.e., the billers 700). In Step 7L,each biller's receipts are swept into their respective DDA or cashconcentration accounts 780.

FIG. 8 illustrates the third bill payment embodiment involving customerconsolidation. In this third bill payment method, the e-bills 800 aredelivered directly to the customer in the form of an e-mail or otherdelivery means. Each e-bill 800 contains a hotlink, which directs thecustomer to the biller's web site 855 (or to a CSPs website if the CSPhandles the payments for the biller). When the customer activates itsWallet 215, the web site 855 recognizes the Wallet 215 customer andinitiates a payment message as previously described. The customer canthen push the payment to the biller in the same manner that a payment ispushed in the web shopping embodiment of FIG. 2, the pay anyoneembodiment of FIG. 3, as well as the two other bill payment embodimentsof FIGS. 6 and 7 using its PPP 227. As with all the previousembodiments, the biller once again receives the guaranteed funding,reconcilement, and archival records benefits of the present invention.

FIG. 9 depicts a system and method for establishing and funding accountsassociated with a PPP 227 or a PPP enhanced Wallet 215. As describedabove, a user's IPA account 230 is accessed through a PPP 227 or a PPPenhanced Wallet 215 that can be accessed via the Internet 900, ATM 905,telephone 910, Kiosk 915, PC 902, an interactive TV 904, and even aPersonal Digital Assistant (PDA) 920. The primary method for funding theaccounts (e.g., IPA account 230) linked to the PIT 227 or PPP enhancedWallet 215 is through one of the user's other accounts (e.g., DDA, orcredit or debit card accounts). In a preferred embodiment, the PPP 227or PPP enhanced Wallet 215 can receive funds from the other accounts ofthe user using well known online banking functionality. Alternativefunding options can be achieved through an externally sponsored creditcard, by check or money order, or through the ACH network.

Steps 9A through 9C illustrate one method by which a user can install aWallet 215. As previously stated, the preferred embodiment includes anonline banking system 962. The following example uses a fictionaloperator of the system denoted as XYZBank 965 which acts as a PPPenhanced Wallet provider. In step 9A, the user logs onto the Internetand uses its browser 210 to navigate to the XYZBank.com site 960. Instep 9B, the user selects the “Wallet” option from main menu on theXYZBank.com site. On the “Wallet” screen the user is presented with twooptions: “Are you an Online Banking customer?” and “Are you aNon-XYZBank customer? If user selects “Online Banking customer”, theuser is presented with a list of the accounts held by the user at theXYZBank that are supported by online banking. The user then identifiesthe account(s) to which the PPP enhanced Wallet 215 will be linked. Ifthe user desires, a new IPA account 230 can be established for the newPPP enhanced Wallet 215. If the user selects “Non-XYZBank customer”,their PPP enhanced Wallet 215 is linked to an IPA account 230 newly setup for the customer at XYZBank 965.

Next, in step 9C the user sets up the PPP enhanced Wallet 215 for use bychoosing “Install a Web Wallet” from the menu. The user is instructedthat its PPP enhanced Wallet will now be installed as a button on thebrowser 210 toolbar. Once the software for the PPP enhanced Wallet 215has been installed on the user's system (e.g., the user's PC or webserver), the user is prompted to provide some background informationthat will assist the user in making web purchases and payments. Anexample of some of the background information requested includes theuser's shipping name address. At this point, the PPP enhanced Wallet 215installation is complete and the user can perform any of the methodsdescribed above with respect to FIG. 1-8. As previously described, usingthin Wallet technology, the majority of the software and data associatedwith the PPP enhanced Wallet 215 resides on a server maintained by theXYZBank 965.

Steps 9D through 9K illustrate two methods of funding the PPP enhancedWallet 215. For customers of XYZBank 965, the primary method for initialand future funding of the PPP enhanced Wallet 215 is performed through alink between the PPP enhanced Wallet 215 and the Online Banking system962 as described above. The link between the PPP enhanced Wallet 215 andthe Online banking 962 can be transparent and the user can sign onsolely to its PPP enhanced Wallet 215 and be seamlessly provided withthe online banking 962 functionality. For initial funding of the PPPenhanced Wallet 215, the user selects “move funds to/from Wallet” froman online banking menu. The user then provides the followinginformation: the source of the funds—checking, credit card, savings,etc.; the dollar amount of the transfer; the funding date; and whetherthis is one time transfer or a repeat transfer. Upon completion ofabove, the account associated with the PPP enhanced Wallet 215 isfunded. Subsequent funding of the PPP enhanced Wallet 215 associatedaccounts can be done through the PPP enhanced Wallet 215 itself orthrough the online banking system 962. In addition to funding via onlinebanking, instructions can be given for funding via phone 910, ATM 905,Kiosk 915, or PDA 920 or interactive TV 922.

Steps 9E through 9J illustrate a method of funding the PPP enhancedWallet 215 from an external credit (e.g., cash advance from a creditcard) or debit card, or an external DDA account (external to XYZBank).For the Non-XYZBank customer or an XYZBank customer wishing to fund thePPP enhanced Wallet 215 externally, the user in step 9E selects “fundwith a non-XYZBank account”. The user then selects the financialmerchant of the account (e.g., American Express™, VISA™, etc.) and keysin account number, expiration (if applicable), and the dollar amount ofthe funding transfer. The funding request is transmitted to a merchantacquirer 970 associated with or part of XYZBank 962. This accountinformation is stored for future funding requests.

In step 9F, the merchant acquirer 970 (such as Chase Merchant Services™)authorizes the funding transaction and passes the request through theEFT switch 270. In step 9G, the financial merchant 980 (e.g., VISA™)receives funding request via EFT switch 270, and verifies the cardnumber, expiration, and credit limit. If the funding is authorized bythe financial merchant (step 9H) the funds are received by the PPPenhanced Wallet 215, more specifically, the IPA/VPL account 230 linkedto the PPP enhanced Wallet 215 (step 9I). The funds settlement (step 9J)between the credit card's bank and user's bank typically occurs once perday. A similar process occurs when the funding is from a user's DDAaccount at another financial institution 980. In the above descriptionwith respect to FIG. 9, it is appreciated that the procedure forestablishing and funding a PPP enhanced Wallet 215 equally apply toestablishing and funding a PPP 227 as a stand alone product.

FIG. 10 illustrates an alternative embodiment of the present inventionin which the IPA user is able to fund payments according to the presentinvention using a credit card. Although the illustration of FIG. 10 andfollowing description is made with respect to the Internet shoppingembodiment of FIG. 2, this alternative credit card embodiment is equallyapplicable to the embodiments of FIGS. 3-8. Unless otherwise specified,all of the steps of the embodiment of FIG. 10 are the same as describedwith respect to FIG. 2.

In step 2H, when the user agrees to make the EFT credit payment, theuser is given the option to fund the payment with his or her creditcard. The PPP 227 either already knows the user credit card number orprompts the user for the number. The PPP 227 then contacts the creditcard issuer 290 as described above with respect to FIG. 9 forauthorization for the credit in the amount of the payment. When theauthorization is returned, the PPP 227, transmits the credit to the IPAaccount 230 simultaneously with the transmission of the paymentauthorization. The IPA account 230 then has sufficient funds to transmitthe EFT credit to the merchant's VPL account 235 as described above. Atthe end of the day, a settlement occurs between the bank 220 and thecredit card issuer 290 in the amount of the credit. This settlement issimilar to the settlement (step 2M) between bank 220 and bank 275.

Using this embodiment of the present invention, a user is able tocontinue to use its credit card for online purchases, but because of theunique features of the IPA account and the EFT credit push, the useronly has to give its financially sensitive information (i.e., creditcard number) to its trusted institution. In this embodiment, the user ofable to fund larger purchases than would normally be found in the IPAaccount 230.

Although the present invention has been described in relation toparticular embodiments thereof, many other variations and other useswill be apparent to those skilled in the art. It is preferred,therefore, that the present invention be limited not by the specificdisclosure herein, but only by the gist and scope of the disclosure.

We claim
 1. A computer implemented system for processing payments, thesystem comprising: a server including a computer memory storing a firstdatabase including a directory, the directory including authenticatedregistrant information comprising authenticated information for a payee,the directory identifying via a publicly available account identifier atleast one linked account of said payee; a payor computer having accessto the directory; and a first bank computer linked via a computernetwork to the server, the first bank computer configured to accesspayor account information from a payor account at the first bank, andconfigured to receive payment information from the payor computeridentifying the payee and to transmit a payment from the payor accountat the first bank to the linked payee account located at a second bankwithout using an intermediary to transfer said payment.
 2. The system ofclaim 1, wherein the linked payee account is a deposit only account. 3.The system of claim 1, wherein the publicly available account identifieris an address of the payee account.
 4. The system of claim 1, whereinthe directory includes at least two of a name, post office address,phone number and email address of the payee accountholder.
 5. The systemof claim 1, wherein when the payee is a business, the directory includesan industry or type of business.
 6. The system of claim 1, wherein thedirectory is accessible by telephone.
 7. The system of claim 3, whereinthe address includes a bank identification number and an accountidentification number and the account is a deposit only account.
 8. Thesystem of claim 7, wherein the directory is publicly available.
 9. Thesystem of claim 1, wherein the directory is internet accessible andsearchable for selection and retrieval of account identifiers.
 10. Thesystem of claim 1, wherein the first bank computer is configured toconsult the directory to verify the accuracy of the address to which acredit message is sent.
 11. A computer implemented method for processingpayments, the method comprising: storing, in a computer memory of afirst server, a first database including a directory, the directoryincluding authenticated registrant information comprising authenticatedinformation for a payee, the directory identifying via a publiclyavailable account identifier at least one linked account of said payee;receiving, at a first bank computer, payment information from a payorcomputer identifying a payee, the first bank computer linked via acomputer network to the first server; accessing, using the first bankcomputer, payor account information from a payor account at the firstbank, transmitting a payment from the payor account at the first bank tothe payee's linked account located at a second bank without using anintermediary to transfer said payment.
 12. The method of claim 11,wherein the linked payee account is a deposit only account.
 13. Themethod of claim 11, wherein the publicly available account identifier isan address of the payee account.
 14. The method of claim 11, wherein thedirectory includes at least two of a name, post office address, phonenumber and email address of the payee accountholder.
 15. The method ofclaim 11, wherein when the payee is a business, the directory includesan industry or type of business.
 16. The method of claim 11, furthercomprising accessing the directory by telephone.
 17. The method of claim11, wherein the address includes a bank identification number and anaccount identification number and the account is a deposit only account.18. The method of claim 17, wherein the directory is publicly available.19. The method of claim 11, wherein the directory is internet accessibleand searchable for selection and retrieval of account identifiers. 20.The method of claim 11, further comprising allowing payor access to thedirectory and to the first bank computer.
 21. The method of claim 11,further comprising transmitting the payor a payment message withinformation including Payee BIN; Payee Account #; Transaction ID; andthe dollar amount of the payment.
 22. The method of claim 21, furthercomprising consulting the directory to verify the accuracy of theaddress to which a credit message is to be sent.